Retail media and social are experiencing similar drops in ad rates. The same directional trends apply across search and social: Spend increased by 12% for both, while impressions for each soared about 30%, causing ad rates to drop into negative territory.
Ad platforms can only ramp up ad loads so far. It’s clear that as traffic and clicks begin to taper off, leading search and social platforms are increasing ad loads to find growth. But that comes with the risk of overcommercializing their platforms and turning away users.
Retail media clearly has a longer runway on ad monetization. Retail media is better positioned to increase ad loads than search and social because many RMNs are still maturing and enabling more inventory. Walmart—the No. 2 to Amazon among RMNs—implemented a second-price auction and search algorithm changes in early June 2022 that drove down CPCs, according to Skai. Other RMNs are similarly innovating to increase the scale, relevance, and ease of use of their platforms, all of which encourage more investment from brands.